Dow loses 108, back in the red for 2015

Dow loses 108, back in the red for 2015

The Dow Jones industrial average dropped 107 points Monday to end up back in the red for 2015 as domestic and global concerns weigh on investors. Chief concerns include the ongoing stalemate between Greece and its creditors and this week’s Federal Reserve meeting on interest rate policy.

Also Monday, the S&P 500 shed 0.5% and the Nasdaq composite lost 0.4%. All three of the major benchmarks moved off earlier, deeper losses. For the blue chips, the Dow’s 0.6% slide put the index at 17.791.17 — about 32 below its 2014 finish of 17,823.07. Wall Street is coming off a volatile week, which saw the Dow end a four-day losing streak with a 236-point gain Wednesday only to falter Friday with a nearly 141 point swoon on renewed fears of a possible Greek default and exit from the eurozone. Last week also saw turbulence in the bond market, with the yield on the 10-year U.S. Treasury note touching 2.5% for the first time in nine months before bond prices rallied — and yields dropped back — on Thursday and Friday amid the ongoing uncertainty related to Greece’s unproductive talks with its creditors. The 10-year yield was trading at 2.36%, down from 2.40% Friday.

“Greece concerns (are) rattling markets,” Jim McCormick of Barclays told clients in an early-morning note. “Global markets have started the week on a softer note after talks on the Greece bailout broke down on Sunday.” This week on Wall Street is shaping up to be another volatile one and stocks fell Monday, due in large part to Greece’s inability to seal a deal with its creditors with a month-end deadline to strike an agreement coming up fast. Investors will also be in search of clues from the Federal Reserve this week on the so-called liftoff of its interest rate hikes.

“All eyes (will be) on the Fed this week on (the) back of stronger economic data,” said John Stoltzfus, an investment strategist at Oppenheimer. Last week, economic data ranging from retail sales to consumer confidence all came in solid, putting the Fed on a collision course with an eventual rate hike. The Fed kicks off a two-day meeting on rates Tuesday and will issue a policy statement Wednesday. Fed Chair Janet Yellen will also face off with the press after Wednesday’s meeting breaks up, and will discuss the Fed’s current economic outlook and hopefully provide investors with a road map as to when the Fed plans to raise rates and why.

“This week is likely a crucial one for U.S. bonds, with the Fed meeting, including new forecasts and Yellen’s press conference and important data,” McCormick added. In economic news, the government reported Monday that industrial production fell 0.2% in May as the manufacturing sector struggles with a stronger dollar and lower oil prices. Wall Street will also get fresh readings on housing starts Tuesday and on Thursday on the all-important May CPI, which will provide key data on inflation at the consumer level.